Monday, January 5, 1998Last modified at 1:40 a.m. on Monday, January 5, 1998

Israeli government faces no confidence vote

TEL AVIV, Israel (AP) - Bringing the government of Prime Minister Benjamin Netanyahu to the brink of collapse, Israel's foreign minister angrily resigned Sunday, saying he is "no longer a member of this government."

A scowling David Levy bitterly denounced Netanyahu's government for both abandoning the peace process with the Arabs and ignoring the mounting problems of Israel's poor and unemployed.

The resignation of the Cabinet's main supporter of the peace process sent the government into a tailspin, and Israel's TV and radio stations went into an emergency regime of all-evening talk shows discussing the chances of early elections and the possibility that the dovish Labor Party would return to power.

The opposition Labor Party announced it would bring a motion of no-confidence in Parliament next week. If it wins an absolute majority, elections could be held within two months.

"This government has shamed its voters," Labor Party leader Ehud Barak said in Tel Aviv. "The gap between what Netanyahu promised and what is happening ... is so grave that we cannot go on."

Supporters gathered outside Levy's home in the provincial town of Beit Shean, urging him to stick by his decision and work to bring down the 19-month-old government.

Making good on a threat he issued Thursday, Levy had a letter of resignation delivered to Netanyahu's office late Sunday. By law it doesn't go into effect for 48 hours - meaning Levy theoretically could still back down.

Netanyahu issued a statement saying he regretted Levy's decision and hoped "he will change his mind."

At a news conference, the prime minister said he believed his coalition would prevail, and added that the government was on the brink of resuming the peace process and "doing the right thing to bring about a secure peace - not just a peace on paper."

Levy's threat last week to step down - inspired by his dissatisfaction with an austere 1998 budget - was viewed with some skepticism: He has made similar threats at least six times since the current coalition was formed in June 1996.

Netanyahu responded by delaying a vote on the budget - which he can do for three more months before his government falls - and figuring out how to come up with a reported $100 million in social subsidies for lower-income Israelis.

But Levy said Sunday that despite Netanyahu's efforts, he had decided "the partnership had failed."

Hanan Ashrawi, a senior member in the Palestinian Cabinet, said the internal chaos in Israel's government would likely delay the peace process even as the United States is pushing for progress.

Without Levy, Netanyahu would be more dependent on Cabinet hard-liners for support, which would give him "a ready-made excuse not to implement agreements," Ashrawi said.

Hard-line Agriculture Minister Rafael Eytan admitted Sunday that "the government in its present form is hanging by a thread" and called on Netanyahu to initiate new elections himself.

Such elections, Ashrawi said, could "be used as a pretext to put the peace process on hold."

Still, Netanyahu is well behind Barak in the polls, and a return of the dovish Labor Party to power would certainly speed up the peace process.

Without Levy's Gesher faction, Netanyahu's coalition would fall to a minimal 61 members of the 120-member Parliament - and he could face more defections from other supporters of the peace process, those within his party as well as other members of the coalition.

Despite the political crisis, the United States is not relieving pressure on Netanyahu to deliver on Israel's promise of a troop pullback in the West Bank.

President Clinton's special Mideast envoy, Dennis Ross, is due to visit the region this week. On Jan. 20, Netanyahu is expected to present a concrete pullback plan at the White House, and Clinton is to meet with Palestinian leader Yasser Arafat two days later, Israel and Palestinian officials confirmed Sunday.

Levy appeared unlikely to change his mind about his resignation, especially after his condemnation of the government's half-hearted peace moves.

"We could have derived advantages if we had led the process," Levy said. "We will have to give in later, under more difficult conditions."

Levy, 60, has been the weakest link in Netanyahu's coalition since their uneasy alliance began. Netanyahu once opposed the peace process and remains lukewarm about it, while Levy has emerged as an unequivocal supporter. Also, Netanyahu is committed to free markets, while Levy leans toward active social policy.

Some say ego is at the root of the crumbling relationship: The thin-skinned, Moroccan-born Levy, a former bricklayer who rose through trade-union politics, has never abandoned his dream of becoming prime minister and cannot stand playing second fiddle to the younger, slicker Netanyahu.

Levy, who immigrated to Israel in 1957, is a hero to many fellow Sephardim, or Jews of Middle Eastern descent.

He said that in the event of new elections, his Gesher faction would run independently of Netanyahu's coalition, which would test Levy's political strength.

In 1992, Levy helped bring down Prime Minister Yitzhak Shamir by suggesting just before elections that the Likud Party was racist toward Sephardim. When he lost Likud's leadership race to Netanyahu a year later, he bolted the party and formed Gesher, only to realign himself with Netanyahu just before the 1996 election.